PPAs signed for 417 MW in South Africa

South Africa's public utility Eskom has signed power purchase agreements (PPA) for nine photovoltaic projects worth 417.1 MW, under the country’s renewable energy expansion program. Meanwhile, the government has expressed concern about the grid's capacity to absorb additional electricity from renewable energies systems.

The preferred bidders have also signed implementation agreements and direct agreements with the Department of Energy and lenders, paving the way for the implementation of the second window of South Africa's Renewable Energy Independent Power Producers Procurement Program (REIPPP).

The implementation agreement deals with the project developers' commitment to properly fulfill the bids. Meanwhile, the direct agreement is signed between the Department of Energy, the developer and the lender to provide necessary support to the lender and the bidder, in terms of the commitments made under the PPA and the implementation agreement. No further details on the PPAs were released.

"The signing ceremony marks a transition to a new era. It brings to life the government’s commitment to change the energy landscape and to help the economy grow," said Eskom Transmission Director Mongezi Ntsokolo.

"Today is an important day because it is another opportunity for successful bidders and Eskom to enter into the requisite agreements that will see the continuation of the REIPPP program," added Energy minister Dipuo Peters.

Peters asked bidders to ensure more local content and the involvement of women and the disabled in the development of their renewable projects as outlined in their bids submitted last year.

"We are starting to see progress in the establishment of local manufacturing nodes that produce some of the requisite components in the construction of solar and wind farms," she said.

The minister also said that the Department of Energy will from time to time subject the PV projects to assessment to ensure adherence to inclusion of local content and compliance with South Africa Bureau of Standards (SABS) 1286, an independent verification process which promotes the localization of production and addresses the current economic needs of South Africa.

Director General at the Department of Energy Nelly Magubane warned PV developers and other renewable energy project owners that the government will not accept any changes in their already submitted bids.

"I would like to caution all bidders that such behavior is unacceptable as it costs the Department of Energy lots of time and money in evaluating the resubmitted information to ensure it complies with bid requirements," said Magubane.

Existing grid capacity

Meawhile, the government has also expressed concern over the capacity of the existing grid to absorb the projected additional electricity from renewable energy projects. Magubane called for the "strengthening of the grid in areas with abundant solar, wind and other clean resources for electricity generation."

The nine solar photovoltaic projects are among 19 renewable energy projects approved under REIPPP second window that reached financial close last week. This phase will inject an additional 1044 MW to the national grid.